Your Down Payment

Lots of buyers can easily qualify for several different kinds of mortgages, but they don't have much to pay the standard down payment. Below are a few straightforward methods that will help you get together a down payment

Reduce expenses and save. Turn your budget inside out to find ways you can cut expenses to save for your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically transferred into a savings account each pay period. You might look into some big expenses in your spending history that you can live without, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or skip a vacation.

Sell items you don't need and get a part-time job. Try to find a second job. This can be rough, but the temporary difficulty can help you get your down payment. You can also seriously consider the possessions you actually need and the things you can put up for sale. A closetful of small things might add up to a fair amount at a garage or tag sale. You could also research what any investments you own could bring if sold.

Borrow your down payment from a retirement plan. Explore the details for your particular plan. You may borrow funds from a 401(k) for you down payment or make a withdrawal from an Individual Retirement Account. Be sure to ask your plan representative about the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for assistance from family members. First-time buyers are sometimes fortunate enough to receive down payment help from caring family members who are prepared to help get them in their own home. Your family members may be pleased at the chance to help you reach the goal of owning your first home.

Contact housing finance agencies. Special mortgage loans are extended to buyers in specific situations, like low income purchasers or people looking to renovating houses in a certain part of town, among others. Working with this type of agency, you probably will get a below market interest rate, down payment help and other incentives. Housing finance agencies may assist eligible buyers with a lower rate of interest, help with your down payment, and provide other benefits. The principal mission of not-for-profit housing finance agencies is build up residential ownership in certain parts of the city.

Explore no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income individuals get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling buyers who will not qualify for a conventional loan, to obtain home financing. Interest rates with an FHA loan normally feature the going interest rate, but the down payment for an FHA loan are below those of conventional loans. The required down payment can go as low as 3 percent while the closing costs might be covered by the mortgage loan.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan requires no down payment, has mimimal closing costs, and provides a competitive rate of interest. Although the mortgage loans are not actually financed by the VA, the department verfifies applicants by providing eligibility certificates.

• Piggy-back loans

  You may finance your down payment using a second mortgage that closes with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In the option of the seller "carrying back a second mortgage," the seller loans you part of his or her home equity. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Often, this form of second mortgage has higher interest.

No matter how you gather down payment money, the thrill of owning your own home will be just as sweet!

Want to discuss down payment options? Call us: 8557558700.